HPCL, BPCL, IOCL gain as Citi remains bullish on OMCs; Mahanagar Gas also rises

Shares of oil marketing companies (OMCs) such as BPCL, IOCL, and HPCL rose in the morning deals on March 27 after Citi remained bullish on the companies, despite 70 per cent to 80 per cent up moves in these counters in the past six months.

The brokerage believes that OMCs will benefit from a discernible shift in the government's stance towards public sector undertakings (PSUs). 

As of 11:19 a.m., BPCL was up 1.41 per cent, IOC was up 1.13 per cent and HPCL was up 1.17 per cent. Mahanagar Gas was up 1.23 per cent.

As per the Citi report, the valuations of OMC companies are not demanding, and the margin outlook is favourable in both key segments.

Citi's ratings on OMCs, GDCs

Citi has upgraded its rating on Mahanagar Gas to 'neutral' from 'sell' and given a target price of Rs 1,405.

Among OMCs, the brokerage has maintained a 'buy' call on HPCL and given a target price of Rs 635 apiece. Further, it has reiterated a 'buy' rating on BPCL and given a target price of Rs 750 apiece. Additionally, the brokerage has maintained a 'buy' call on IOC with a target price of Rs 195 apiece. 

Recently, two brokerages, Nomura and Macquarie, revised their ratings for oil marketing companies (OMCs) stocks.

HPCL share price target

Nomura has a 'buy' call on the Hindustan Petroleum Corp Ltd (HPCL) stock with a target price of Rs 570. Macquarie, on the other hand, has downgraded the rating on the stock from 'outperform' to 'neutral' with a target of Rs 425.

IOCL share price target

Nomura has a 'buy' call on the Indian Oil Corporation Ltd (IOCL) stock with a target of Rs 195, while Macquarie downgraded the rating from 'neutral' to 'underperform' with a target of Rs 130.

BPCL share price target

Nomura has maintained a 'buy' call on the Bharat Petroleum Corporation Ltd (BPCL) stock with a target price of Rs 735.

Also read: How are OMC stocks placed? Here are the key factors at play

OMCs share price: Past performance 

In a year, shares of HPCL have given a multi-bagger return of over 102 per cent, IOCL shares have also given returns of over 119 per cent, BPCL has gained over 76 per cent and Mahanagar Gas has gained over 44 per cent. 

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